Purchase and Sale Flashcards
What is a land registry compliant plan?
- Scale measurement bar
- Scale noted on plan
- Drawn to a metric scale (1:100 / 1:200)
- Include a 1:1250 scale location plan (urban areas)
- Full address & post code
- North arrow
- Demise outlined in red
Tell me your understanding of the Land Registration Act (2002)?
- Adverse Possession Claim is 10 years.
- Provides framework for electronic property conveyancing.
- Freeholds / New 7 year + leases must be registered with land registry with compliant lease plan.
What are the 6 principles behind the Bribery Act 2010?
- Proportionality
- Top-level commitment
- Risk Assessment
- Monitoring and Review
- Due Diligence
- Communication
What are the four offences set out in the Bribery Act 2010?
Four Offences:
1. Bribery
2. Accepting a bribe
3. Bribing a foreign official;
4. Failing to prevent bribery
Who polices the Bribery Act and what penalties are there for breaching the act?
- Policed by Serious Fraud Office
- Maximum penalty of 10 years imprisonment and / or unlimited fine.
Companies face unlimited fine.
What is a bribe?
Giving / Offering / Promising / Receiving an advantage such as a payment / gift / service for an action.
What are estate agents legal obligations in regards to the Terrorist Financing & Transfer of Fund Regulations 2017?
- Register with HMRC is they let individual properties for more than 10,000 euros a month.
- Individuals / Businesses need to be approved and remain registered with HMRC
- CDD checks must be undertaken on new sales / lettings above 10,000 euros
- EDD checks need to be undertaken if red flags.
- Firms must have policies which identify complex / unusual transactions
- Firms must have procedures to share relevant information / train staff.
What is your understanding of the Terrorist Financing and Transfer of Funds Regulations 2017?
Requirements:
1. Written ML & TF risk assessment
2. Systems / policies / procedures in place
3. Appropriate internal controls
4. Comply with CDD / EDD requirements
5. Comply with PEPs requirements
6. Ensure appropriate record keeping, policies and procedures.
7. AML checks to confirm identity and source of funds prior to exchange.
8. Money Laundering Reporting Officer must be appointed.
9. Firms must maintain records for minimum of 5 years and report discrepancies to Companies House.
What are the penalties for failing to comply with the Terrorist Financing & Transfer of Funds Regulations (2017)? Who polices the regulations?
Policed by National Crime Agency
Assisting with ML:
1. 14 years and/or unlimited fine
Tipping off / failing to report suspicion:
- 5 Years and/or unlimited fine
What are the typical CDD requirements?
Publicly Accountable Body: Government Ownership / Control
Public Limited Company: Listed on Regulated Market (i.e London Stock Exchange)
Private Limited Company: Certificate of incorporation / Full name / registered number / registered office, business address / Names of all directors & shareholders with 25% or more holding / Identification of higher risk client.
Private individual: Passport or Driving licence / Bank statement or credit card bill or council tax statement or utility bill which is not more than 3 months old.
Also obtain information on the purpose and intended nature of the business relationship and proposed funding arrangements as appropriate.
What are some examples of Red Flags?
- Wont provide identity documents
- Changes to parties involved in transaction
- Unusual transaction features
- Payments in unusual currencies
What is the Proceeds of Crime Act 2002? What are the three offences?
Provides powers for enforcement authorities in the UK to recover proceeds of crime.
Three Offences:
1. Concealing criminal property
2. Arrangements (when you facilitate)
3. Acquisition / Use / Possession of criminal property.
What is the Economic Crime Act 2022?
- Includes measures for a beneficial ownership register of overseas entities owning property in the UK
- Strengthens investigation powers into Unexplained Wealth Orders (UWO’s)
- Allows easier prosecution for sanctions-busting and those unwilling to provide identity documents.
When is enhanced due diligence required? What does it entail?
for PEP’s (politically exposed persons)
Entails increased monitoring and more detailed examination of background and purpose of transactions
What RICS document covers bribery & money laundering?
RICS Professional Statement: Countering Bribery, Corruption, Money Laundering & Terrorist Financing (2019).
What is your understanding of the RICS Professional Standard: Countering Bribery, Corruption, Money Laundering & Terrorist Financing (2019)?
- Sets out mandatory requirements, good practice and supplementary guidance.
Part 1:
RICS Regulated Firms Must:
1. Not Accept / facilitate bribery / ML / TF.
2. Have systems / controls in place complying with law.
3. Report suspicion
4. Evaluate and review risks.
5. Act with due diligence
6. Retain records to show firm has met requirements of professional statement.
7. Be confident in quality of 3rd party reliance for AML checks.
8. Verify client by undertaking basic ID checks.
Part 2: Guidance
1. Written policy in place
2. Staff training
3. Code of behaviour
4. Gifts register
Part 3: Supplementary guidance
1. Consider who / what / why (3 W’s)
What are the four main methods of sale?
- Private Treaty
- Informal Tender
- Formal Tender
- Auction
What should you consider prior to recommending a method of sale?
- Clients objectives
- Public accountability
- Current / Future market conditions
- Level of demand
- Target Market
- Timing requirements
What is private treaty?
Parties free to negotiate in their own time without commitment in the open market.
What are the advantages and disadvantages of private treaty?
Advantages:
1. Flexibility
2. Control
3. No obligation to sell
4. Confidential
Disadvantages:
1. Gazumping / Gazundering
2. Late decisions not to buy
3. Associated abortive costs
What is Informal Tender?
What are the advantages and disadvantages of Informal Tender?
